Tariffs vs. Tech: Can U.S. Earnings Outpace Rising Trade Frictions?

This BlackRock Investment Institute commentary assesses the evolving balance between strong U.S. corporate earnings—driven by AI tailwinds—and rising tariff pressures that threaten growth and fuel inflation.

• U.S. equities remain overweight as Q2 earnings rise ~8% YoY, driven by resilient margins and AI-linked investment despite a 15–20% effective tariff rate.

• Tariff impacts are uneven, with automakers and durable goods most exposed, while pricing power and AI exposure offer some firms a buffer.

• Sector and regional granularity is critical, as active allocation becomes more important amid macro crosscurrents and geopolitical uncertainty.

Explore the full report for tactical positioning, macro scenarios, and insights into navigating a bifurcated investment landscape.